Imagination Technologies, the UK company that designs the graphics chips for the iPhone and iPad, will release a new CPU design next year for low-power servers, the company's CEO said this week.

It's part of a broad push by Imagination to expand the use of MIPS chips in all kinds of products, including servers, tablets, smartphones and wearable computers. Imagination inherited the architecture when it bought financially struggling MIPS Technologies last year.

"The intent with MIPS is to cover all the markets where a CPU is relevant," said Hossein Yassaie, Imagination's CEO, at a press event in Silicon Valley on Wednesday.

It's a new and bold effort by Imagination, which is best known for the PowerVR graphics chips used in many top-tier mobile devices, including Google Glass. It hopes to expand the MIPS business in areas where the architecture is already strong, such as networking and home media systems, and also to plow new ground.

That will mean increased competition with Imagination's UK rival ARM Holdings. ARM is the dominant designer of CPUs for smartphones and tablets, and it's also targeting the server market, so the moves by Imagination could set up a grand battle between the two companies over the next few years. ARM, meanwhile, is also going for a bigger slice of Imagination's graphics business.

In servers, both companies are targeting low-power "hyperscale" servers, used by companies such as Facebook and Google to run massive online workloads. They will both have to compete with incumbent Intel, which has stepped up its own efforts to build low-power chips.

ARM and Imagination both develop chip designs that they license to other companies to manufacture. They each offer architectural licenses, which let companies design their own chips from scratch, and licenses for complete core designs, which can be turned into finished products more quickly.

Companies such as Broadcom and Cavium already build MIPS chips for specialized network equipment using an architectural license. But to promote MIPS more broadly, Imagination will offer complete core designs for servers as well.

Asked to give a timeframe, Yassaie said Imagination's upcoming Series5 "Warrior" CPUs will cover every segment of the market -- including servers -- by the end of 2014. It will take a further two to three years for chip makers to create finished server products and get them to market, Yassaie said.

"So for us to be a significant player in [servers] it will take several years. But in terms of technology, come the end of next year I would expect to have a solution for all the markets that are important for a CPU to be in," he said.

Imagination had already made clear that it would use the MIPS acquisition to build CPUs for the tablet and smartphone markets. Yassaie's comments Wednesday show the company is serious about servers as well.

There's nothing about ARM that makes it intrinsically more suitable for servers than MIPS, said Paul Teich, senior analyst with Moor Insights and Strategy. Both are based on RISC (Reduced Instruction Set Computer) architectures that lend themselves to low-power designs.

The "magic" in ARM server chips from the likes of Calxeda doesn't come from the core itself but from the surrounding technologies, Teich said. Nor should software be a hurdle for MIPS, he said, since there are already MIPS versions of Linux, and it would be relatively easy to port other programs to the architecture.

Gartner analyst Mark Hung agreed that "from a technical standpoint," MIPS can be competitive with ARM in servers.

But ARM has a head start. Calxeda and Applied Micro have already developed ARM server chips that customers are testing. If the new MIPS cores don't appear until the end of next year, Imagination will be "on the tail end of being late," Teich said.

Yassaie acknowledged there's work to be done in both servers and smartphones. Initially, he expects to grow the MIPS business in markets where it's already prevalent, such as networking and home media equipment. Mobile may be the hardest market for Imagination to crack, he said, presumably because of ARM's dominance.

But the industry is ready for another CPU design company, according to Yassaie. Vendors don't want to be beholden to a single supplier, and he's quick to label ARM a "monopoly" for its dominance in mobile devices.

Several years ago, the PC was "the only ecosystem that existed," he said. "But now there are several ecosystems, with some pretty big players behind them, and it's completely untenable to expect those people to put up with such control."

There's also renewed confidence in MIPS now that it's owned by a stable company, according to Yassaie. "People were worried about MIPS's future, there was a cloud over its head, and now that's gone away."

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

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